Calmly, the Russians prepare for the effects of the “deluge” of penalties. “The Americans promised us this economic war. It’s ok for now. But we feel that a crisis is coming”anticipates this close friend of one of the main Russian oligarchs.
Connected to the Kremlin, these billionaires, outposts of Vladimir Putin’s system, find themselves targeted by American and European measures. While two of the most famous of them, Mikhail Fridman and Oleg Deripaska, have expressed doubts about the Russian offensive in Ukraine, many have not spoken publicly. But they don’t think less.
→ ANALYSIS. War in Ukraine: for the Russian oligarchs, Putin is no longer infallible
“I don’t know if, in history, the shock that awaits us will have precedents. It won’t be 1991. It will be closer to 1917…”, predicts the same source. Reference to the fall of the USSR which plunged the country into a crisis throughout the 1990s. And reference to the economic bankruptcy which, with its share of unemployment, inflation and supply problems, had accompanied the climate of anarchy leading to the Bolshevik revolution.
“In 2022, there will be no revolution, because our government has been able to prepare for sanctions”continues this well-informed close oligarch. “But the shock promises to be of an unprecedented magnitude! »
The free fall of the rouble, which has lost 30% of its value for two weeks, is already making imports more expensive and has therefore revived inflation. It is close to 10%, a record since 2016. We are far from the Kremlin’s promise to curb it to 4%. ” This is just the beginning… “warns Sofia, employed in a private group.
→ EXPLANATION. War in Ukraine: Russia in the sights of international justice
The central bank was indeed forced to raise its key rate very sharply, by 9.5 points, to 20%. In turn, this measure will increase the interest rates of all borrowings, slow down investments in Russia a little more. “The harmful effects of the sanctions, we will not feel them right away. It’s going to hit us in three, six, nine months…”dreads Sofia.
The price of baby diapers has tripled
In a country where over-indebtedness was already a problem, raising rates will be difficult for families who are already seeing the effects of the price hike. “Everything goes up suddenly, from groceries to the tennis racket I had to buy for my son”worries Yana, a mother in Moscow. “The official inflation figure is one thing. The reality in stores is another.she testified, citing the example of the price of imported baby diapers, which suddenly tripled.
“20-30% increases on most consumer goods! See more “, says Andrei in the same way. Father of a family, he shows the pots bought for his baby. “They went from 800 to 1,500 rubles in a year”he explains (€6 to €11 today), recalling that inflation was rising even before the Ukrainian crisis.
“The perception of sanctions will however be quite different from Moscow”, warns Mikhaïl, an employee of the automobile industry who, in his sector, already sees the inflationary effects on imported spare parts. His daily life is also affected by the partial exclusion of Russian banks from the international Swift exchange system and the restrictions on the exit of foreign currencies from bank accounts.
→ EXPLANATION. Ukrainian crisis: against Russia, an economic weapon called Swift
Last week, Mikhail spent hours in queues at his bank trying to withdraw as much cash as possible. “But this does not affect life in provinces where Russians do not have Visa and MasterCard cards or euro accounts…”he quips. “The Kremlin’s soothing talk about the limited impact of Western measures will sit well there and even boost Putin’s popularity! »
“The main thing is that we taught Kiev a good lesson…”
In Moscow itself, supporters of the Kremlin show similar bravado in the face of Western sanctions which nevertheless continue to affect everyday life. Pharmacies are complaining of shortages, already running out of insulin and other diabetes products made overseas.
The list of Western brands and firms that are withdrawing or temporarily closing continues to grow. Latest after Zara, H & M, Ikea stores: Starbucks and McDonald’s. “We will live very well without them… And, as in 2014 and the first wave of sanctions, this will ultimately allow the Russian economy to refocus on itself and strengthen itself”says Mikhaïl, a pro-Kremlin journalist. “The main thing is that we gave a good lesson to Kiev and to the West! »
→ GRANDSTAND. War in Ukraine: “For Putin and Lukashenko, European societies are decadent”
For the moment, according to official polls, Vladimir Putin’s popularity is only growing: in a week of war, his confidence rating has gone from 60 to 71%. “The harmful effects of this new economic crisis on the political stability of the regime are still uncertain”recognizes a European observer in Moscow. “Russia will stand”, replied Dmitri Peskov, the Kremlin spokesman. But he had to admit it: the economy is suffering “a serious blow”.
Planes risk being grounded
Vladimir Putin keeps saying that economic retaliation is an opportunity for Russia to produce its own goods. If progress has been made in agri-food or textiles, for technologies, progress has been minimal so far.
Authorities and public media do not dwell too much on the heavy sanctions aimed at civil aviation. With the ban on the export of aeronautical equipment and spare parts, the United States and the European Union are dealing a very hard blow to airlines. Unless you take risks on safety, this amounts to preventing the proper maintenance of the fleet and therefore its use. A real problem in the largest country in the world where the plane is the only way to travel quickly.
“We are going to live under a real blockade…”, sighs Dmitri, in the line in front of his bank in Moscow. This father, a 40-year-old executive in a private company, has just taken out his savings and, after the rate hike, renegotiated his credits. “In fact, Western sanctions and Russian countermeasures mean that we live surrounded by punitive measures. In the end, all of this risks making us poorer. »
The main sanctions against Russia
Since the outbreak of Russia’s invasion of Ukraine, the EU, US, UK, Japan and Canada have adopted a large number of sanctions:
Prohibition of access to European capital markets for Russian financial institutions.
Blocking of assets of the Russian Central Bank located outside Russia.
Closure of access to Swift interbank messaging for several major Russian banks.
Prohibition of access to their airspace for Russian companies.
Ban on export to Russia electronic components, spare parts for planes or cars.
The United States and Canada have also halted imports of Russian oil.
To our readers
After having suspended his activity for a few days, our correspondent in Moscow, Benjamin Quénelle, resumes his collaboration with our newspaper. However, he is forced to work in compliance with the new Russian law which heavily penalizes journalists who disseminate information aimed at “to discredit” the Russian armed forces.